Acquiring Franchises

When you buy a franchise, you are buying an established idea or brand that has already proved to be successful. It is shown that franchisees stand a much better chance of success than people who start their own independent businesses. Franchises have been shown to produce Better Market Penetration. Franchisees are normally well established as part of the local community, either on a personal level or as a result of their past business activities. This can give them a very significant advantage in gaining new business for the franchise at a local level. Franchises offer the independence of small business ownership supported by the benefits of a big business network. You don’t necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model.

We have experience with franchising and reviewing FDD’s (Franchise Disclosure Documents). We sought out the guidance of a professional franchise advisor to assist us in focusing on the right opportunities to get started.  

Purchasing a franchise is like any other investment. There are no guarantees of success. The Federal Trade Commission, the nation’s consumer protection agency, has prepared A Consumer’s Guide to Buying a Franchise to help you decide if a franchise is right for you. 1. It explains how to evaluate your finances, abilities and goals. 2. It suggests ways to shop for a franchise opportunity and highlights key questions you need to ask before you invest. 3. It also explains your rights. For example, under the FTC’s Franchise Rule, a franchisor must give you a Franchise Disclosure Document (FDD) before you pay any money or sign a contract.

a. It explains how to use the disclosure document that franchisors must give you — under the FTC’s Franchise Rule — so you can investigate and evaluate a franchise opportunity.

b. The disclosure document provides:

i. legal and financial history of the franchisor and its executives ii. the costs to start and operate the franchise iii. the franchisor’s claims about sales, costs and profits iv. contact information for current and former franchisees you can talk with v. the franchisor’s rules about ending or renewing a contract

Visit the Federal Trade Commission website at https://www.ftc.gov/ to learn more about acquiring a franchise. See Other Important Links below: • FTC’s Consumer Guide To Buying A Franchise • FTC Consumer Website